Gov. Schwarzenegger terminated your protection!

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Wednesday, October 17th, 2007

On Saturday, California Governor Arnold Schwarzenegger vetoed legislation that could have protected California consumers from identity theft.

The Governor vetoed AB 779 which aimed to prevent retailers and other businesses in California from storing your secret debit card PIN and debit and credit card numbers every time you make a purchase using your ATM or credit card. Had the bill become law, businesses in California would have been required to have a stated policy on what information they would need to disclose to the public in the event of a security breach. The legislation passed with bipartisan support in both houses of the California legislature, 73 to 0 in the Assembly and 30-6 in the state senate. An uncommon coalition consisting of law enforcement, consumer advocates and credit unions supported AB 779.

It takes a law
The Payment Card Industry, PCI, whose members include VISA, MasterCard, American Express, Discover and JCB of Tokyo, adopted voluntary standards for merchants. Voluntary standards, however, are no guarantee of compliance. On July 30, 2007 VISA issued a press release showing that less than half, only 40% of the largest merchants, those making at least 6 million transactions per year, were in compliance with the industry’s own data security standards. Clearly, it takes a law to assure that businesses will comply with standards to protect consumers. AB 779 would have codified several of the industry’s own standards into law. Source: http://corporate.visa.com/md/nr/press719.jsp

The next regular session of the California legislature will convene in January 2008. At that time the bill’s sponsor, Assemblyman Dave Jones, D-Sacramento, will have to decide if he feels he can mount a successful override of the Governor’s veto. Stay tuned.

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